Tuesday, December 22, 2009
Third quarter GDP revised up again
Posted by David Smith at 09:45 AM
Category: Thoughts and responses

The Office for National Statistics is engaged in a slow striptease when it comes to the question of when the UK economy emerged from recession. The latest revision has GDP down 0.2% in the third quarter, from a preliminary estimate of 0.4% and an interim calculation of 0.3%. The 0.2% was slightly worse than would have been expected from a straight read across from the stronger construction numbers the ONS had suggested would result in a 0.1% decline. Weaker services, down 0.2% instead of 0.1% (despite stronger surveys) appears to make up the difference.

Looking at the expenditure data, consumer spending (up 0.1%) - despite a jump in the saving ratio from 7.6% to 8.6% - investment (up 2.2%) and government spending (up 0.2%) all rose in the third quarter, as did exports, up 2.5%. So why did GDP decline? Imports rose slightly faster than exports and inventories apparently plunged again. In time, we will see that GDP rose in the third quarter. More details here.